Frequently Asked Questions

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S Corporation FAQs

No, an S-Corporation is a special tax classification. Making an S Corporation election—or revoking one—requires a filing with the IRS, not the state. We’re available assist you with making an S Corporation election, though we recommend soliciting guidance from a tax professional as well.

Yes, you can convert to a C Corporation or an LLC should your business needs change, as long as the requisite percentage of shareholders agree (Compared to LLCs, S Corporations can more easily convert to C Corporations.) Such a change will have tax and legal consequences, so be sure to discuss your plans with a legal professional.

S Corporations must adopt bylaws, designate directors, shareholders, and officers, and issue shares of stock to owners. The S Corporation must hold an organizational meeting (initial meeting of directors) where these actions are taken, along with other activities (like approving a resolution to open a business bank account).You are required to keep corporate minutes (in a corporate record book) and allow shareholders to vote on major corporate decisions. You must also file annual reports to maintain good standing with the state(s) where you operate.

First, you must file Articles of Incorporation with the state and designate a Registered Agent. Once your Articles of Incorporation are accepted, you’ll file an election (Form 2553) with the IRS to be taxed as an S Corporation. (All shareholders must all consent in writing to the S corporation election. Not every corporation can be an S Corporation. S Corporations can't have more than 100 shareholders and shareholders can't be non-resident aliens. S Corporations can have only one class of stock (disregarding voting rights). S Corporations cannot have C-Corporations, other S Corporations, LLCs, partnerships, or many trusts as shareholders.

An S Corporation (“S Corp”) is formed under state law as a regular corporation. This protects each owner’s personal assets from debt. It then makes an IRS election to pass income and losses through to the owner(s), who pay taxes on them when they file their individual returns.

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